Import Foreign Automobiles in Chinese

Import foreign automobiles in Chinese

Hong Kejie 0987788

General Research and Technology 2021 W01/Doctor Braxton

12/3/2016

Contents

1. Introduction
2. Literature review
3. Questions and hypothesis
4. Research methods
5. Result
6. Conclusion
7. Reference
8. Appendixes

                       Introduction  

Chinese consumers prefer foreign automobiles because of their quality and brand reputation. However, Chinese automobiles manufactures will face potential bankruptcy. The most important thing is improving the technology The Chinese government should increase import tax to help Chinese automobiles manufactures. Chinese government imports lots of foreign automobiles in China，which cause a large damage for Chinese native automobile manufactures because of foreign cars’ safety, quality and comfort. The research will take about other reasons which cause a large damage for Chinese native automobiles manufactures. Does there have more deeply reasons to cause this problem? The research also talks about the measures to solve this problem. What measures should be taken by government to face this challenge? This is because a complete industry is important for Chinese military and economics. Automobiles manufactures is an important role in Chinese industry. In the next, the research will focus on literature review.        

Literature review

        There are three theories. The first theory is “trading market access for technology” presented by Cheng，Yuan. According to his theory, that the technology and equipment contributed by a foreign Junior Varsity as its investment must be highly advanced technology and equipment that suit domestic needs. That means the foreign automobiles’ equipment and technology need to suit Chinese needs. The second theory is “catch-up consensus” presented by Yao in 2008. In China, it always called “growth consensus”. It’s an awareness to catch some in some way. The third theory is “consumer price index” presented by Keynes. This means an index of the variation in prices paid by typical consumers for retail goods and other items. Next I will focus on background.

        In the early years, under central planning, China did not have an industrial policy as generally defined in a market economy. It set a goal of rapid catch up and made developing heavy industry a top priority. (Chu.W,2009). Chinese government realized the importance of developing industry especially automobiles manufactures. After taking the measures, Chinese growth and structural change over the last two decades have challenged many established ideas about the engines of economic development and technological upgrades. (Adams, F.G,2014). Chinese government makes some measures to improve the level of Chinese automobiles manufactures. And then, Chinese joined in the WTO, which cause a large damage for Chinese native automobiles manufactures. After joining WTO, China’s law and regulations relating to the auto market have also become more internationalized and transparent. (Shachmurove, Y.,2014). Chinese government makes more and more policies to adapt the international market. We can summary the development of Chinese automobiles manufactures: From 1949s-1978s, Chinese focus on producing trucks because of the demand of agriculture and mining; from 1978s-1990s, Chinese government pushed some policies to development automobiles industry, and Chinese automobiles manufactures begin to development quickly; After 1990s, Chinese automobiles industry begin to diversification and start to be weak; after joining the WTO, Chinese automobiles face lots of challenge but also can get benefits from the foreign technology.

        There are mainly three factors influence Chinese automobiles manufacturers: technology, policy, and environment. Technology is the primary factor that can improve Chinese automobiles competitiveness. Policy is an important role that can influence the positivity of Chinese automobiles production. “absorbing foreign technology to establish technological capability” (Lu, 2006), this show Chinese government makes policy to improve technology. And the economic environment is the precondition that Chinese car industry can develop well.

Chinese automobiles manufacture’s technology is lower than foreign automobiles. The key to develop Chinese automobiles industry is to improve the technology. In 1997, in order to prepare for the entry into the WTO and to promote upgrading, the Chinese government allowed in more foreign investors and demanded they bring in the latest technology, including Shanghai-GM and Guangzhou-Honda.( He, X.,2012). So Chinese government develop the “trading market access for technology” principle. China can get more advanced equipment and technology from the foreign Junior Varsity

The second and third factors that influence Chinese automobiles industry develop are policy and environment. They are related to each other. Policy change will influence the economic environment and if the economic environment change then the governor will also change the policy. Chinese policy is traditional and exclusive in the past. After joining WTO, China’s law and regulations relating to the auto market have become more internationalized and transparent. ( Gan, L.,2008). Chinese policy needs to suit the environment. The theory “catch-up consensus” is a good annotation for it. Chinese automobiles market become more international and competitive. The national car producers feel nervous about that. They need to have the awareness of “catch-up” to compete. And the government need to make more great policy to achieve “catch-up” awareness. And then, there has been a reduction in the price of cars since China honored WTO commitments to slash car import tariffs. (Zhang l.,2015). China joins the WTO need to cut down its tariff. Government need to suit the environment and policy. Chinese growth and structural change over the last two decades have challenged many established ideas about the engines of economic development and technological upgrades. ( Huaichuan, R., George, Y, 2008). The author think the Chinese economic environment become better and better. It’s important to the automobiles industry development. The important thing to measure the economy good or not is average income. There has a significance theory “consumer price index”. (CPI). People have a high average income, and there will consume more and more, which has a CPI. If the economic environment is good or not is influence the people’s income. And obviously people will consume less on buying cars, which has a low CPI on automobiles. In the next, I will talk about the hypothesis.